By Tess Stynes
Southern Co.'s (SO) third-quarter earnings fell 12% as the
electric-power company posted a charge related to additional cost
overruns and construction delays at its clean coal power project in
Kemper County, Miss.
One of the largest U.S. utilities, Atlanta-based Southern's
results have continued to be hit by charges to the Kemper project
in recent quarters.
The latest hit to the company's bottom line--revealed in a
filing with the Securities and Exchange Commission on
Tuesday--brings total shareholder charges to $1.14 billion for the
plant. The overall price tag for the project--meant to showcase
technology for generating clean electricity from low-quality
coal--was also raised Tuesday by $243 million to $5.24 billion,
making it possibly the most expensive fossil-fuel power plant ever
built in the U.S.
Southern also pushed back the plant's expected completion date
to the end of 2014, replacing an earlier in-service date of May
2014.
Chief Executive Tom Fanning is expected to elaborate on this
latest charge on Wednesday during the company's quarterly earnings
call.
The latest quarter's results also were negatively influenced by
cooler-than-normal temperatures and unusually heavy rainfall.
Southern reported profit of $869 million, down from $993 million
a year earlier. On a per-share basis, which included preferred
stock impact, earnings were down at 97 cents from $1.11.
Excluding items such as the $93 million charge related to the
Kemper project, adjusted earnings were $1.08. The company had
forecast $1.13 a share. Revenue totaled $5.02 billion, below
estimates of analysts polled by Thomson Reuters for $5.34
billion.
Total retail sales volume was down 1.5%, including declines in
residential and commercial demand that was partly offset by
increased industrial volume.
Shares closed Tuesday at $42.39 and were inactive in recent
premarket trading. The stock is down 8.5% over the past year,
trailing the broader market.
Write to Tess Stynes at tess.stynes@wsj.com
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